The Central Board of Indirect Taxes and Customs (CBIC) is working a scheme that will allow multi-state businesses to use a single PAN-based registration for goods and services Tax (GST) audit and investigations.
The move aimed at improving ease of doing business may be introduced in the next six months, government sources told Moneycontrol.
Multi-state businesses operating under a single Permanent Account Number (PAN) will be managed by a unified central GST authority.
“The CBIC has constituted a working group to examine this scheme. For businesses, the real benefit will be on the investigation or audit side…not routine return filing. Each state registration will remain legally separate, and therefore state-wise filings will continue,” a source said.
The working group is likely to submit the report this month.
At present, such businesses must have multiple state-level registrations, exposing them to multiple audits, investigations, summons, assessments and adjudication proceedings.
The CGST Act mandates businesses to register in every state in which they operate to ensure proper state-by-state allocation of revenue.
Today, if a company follows the same tax position across 10 states, multiple officers can seek the same information and still take different views, the source quote above said.
“A centralised review could mean one set of submissions, one examination of the facts and a more consistent position. This would help businesses align their tax treatment and take strategic decisions with greater certainty,” the source said.
Tax experts say the proposed framework is expected to reduce the administrative burden and, consequently, will result in lower compliance costs for taxpayers, as they would be required to interact with one set of GST authorities.
“However, the extent of such cost savings cannot be assessed at this stage and would depend on the final scope and modalities of centralised administration, including the manner in which such audits, investigations and other departmental proceedings are brought within the centralised framework,” an tax expert said.
This has been a major pain point for many companies and a long-standing demand of business. “If implemented, this would be a major relief on compliance burden,” another tax expert said.
It will create a standard and steady environment for business. For states, there is no concern on revenue sharing. Data can be traced on a state-by-state basis, he said.
